For these generations, communication with brands is still significantly preferred through traditional channels such as TV ads and Radio ads.
The younger generations; Gen Z and Millennials provide a wide target market for alcohol beverage brands; they currently dominate the alcohol beverage market. To win over the next big faction of ‘spirit consumers’, brands need to embrace what makes Gen Z and Millennials different from the older generations; their adaptability to change.
As consumers return to normal, spirit brands need to understand Covid19 impact on the consumption habits of different age groups but with a particular eye on the two biggest consumer markets: Gen Z and Millennials.
Wine maintains a strong showing during the pandemic while Brandy showed consistent growth
Two years after emergence of the pandemic, consumer behavior is still choppy. For alcohol beverage brands, how have these habits impacted on their sales? Kasi retail category demand index, a measure of consumer demand for retail category provides insights on how consumer habits impacted demand for alcohol beverages. The index ranges from + 0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase while an index level close to -0.25 means demand is low. This measure is an effective tool for demand planning.
The average demand for alcohol beverage at the beginning of the pandemic was 0.0128 which was quite low and it was driven by vodka and whisky at 0.023. Across the alcohol beverages, Wine showed the strongest demand across the period. Though it started low, its demand picked from July 2021.On the other hand, Brandy demand has been increasing steadily through the period; it rose from 0.007 to 0.050 in July 2021. Interestingly, prior to the holiday season (October 2020 and 2021) the demand for all alcohol beverages spiked up. This shows that alcohol is consumed more in the holiday season compared to other seasons.
Generally, overall demand for alcohol in Kenya is quite low; doesn’t exceed 0.1. As such, brands need to step out of their comfort zone and identify what consumers on the ground want and work towards efficient product delivery.
Baby Boomers and Millennials drive wine demand while Baby Boomers drive brandy demand
Baby Boomers, aged 45-55yrs (0.059) and Millennials, aged 25-34yrs (0.058) are the primary drivers for the demand of Wine. For Brandy, Baby Boomers take the lead. Interestingly for Brandy Gen X lag behind in the demand at 0.040 even further behind Gen Z.
It is important to note that with Millennials ranking high in both categories of alcoholic beverages, Gen Z follows closely behind. With Brandy, these two age groups need particular attention from spirit brands. This is especially due to the fact that this category of alcoholic beverages has had the most consistent demand in Kenya through the pandemic.
To build demand, spirit brands should restructure their channels to capture Millennials and Gen Z
As of December 2021, Gen Z and Millennials reportedly make up to 55% of the Kenyan population, therefore a major demographic for spirit brands to pay keen attention to. It is important for spirit brands to take advantage of this market, given that they are key drivers of the alcoholic beverage demand amongst most categories.
Distribution of alcoholic beverages should be centered around specialist stores as 72% of Gen Z and 53% of Millennials purchase items through this channel. Only 8% of both these age groups are using online retailers to purchase products, therefore, even with the growth of e-commerce spirit brands should still consider specialist stores as a primary distribution channel.
In terms of their product category drivers, Millennials and Gen Z are looking at price and quality as the top two factors considered.
For these generations, communication with brands is still significantly preferred through traditional channels such as TV ads, and radio ads; they rank 1 and 2 respectively. 57% of Gen Z and 53% of Millennial respondents prefer TV ads, while 46% of Gen Z and 43% of Millennials prefer Radio ads. Social media posts are growing in popularity amongst Gen Z, however, are still overtaken by the traditional media channels.
Spirit brands should ensure that their strategies align with the wants and needs of the consumers; knowing who their category drivers are can enable a brand to tailor their products, distribution, and advertising to suit the needs of their consumers.
Our data intelligence platform can help you track these trends in consumer behaviors in Africa over time. This provides you with valuable insights that can help you or your business make fast data-driven decisions.
Contact our team today to explore how our consumer intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehub
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